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Rovi Acquires TiVo for $1.1 Billion

2 May, 2016 By: Erik Gruenwedel

Combined media companies to operate under TiVo brand name

After much speculation, Rovi Corp. acquired digital video recording pioneer TiVo for $1.1 billion in a cash and stock transaction. The combined companies will be led by Rovi CEO Tom Carson and upon closing of the transaction will adopt the TiVo brand as the new company name. TiVo has been led by interim CEO Naveen Chopra, who is also CFO.

Carson said the deal — announced April 29 — strengthens Rovi digital media distribution business through enhanced data analytics (TiVo owns Digitalsmiths), metadata and IP licensing. Indeed, TiVo has played a significant role in how consumers find, select and watch television.

“As the media and entertainment landscape undergoes a significant evolution, the combined capabilities of TiVo and Rovi place us in a tremendous position to extend services across platforms and to a customer base that includes traditional, over-the-top and emerging players across the globe,” Carson said.

TiVo’s IP assets, combined with Rovi’s recent OTT partnership with Intellectual Ventures, further strengthens the company’s collective position as provider of intellectual property in media and entertainment discovery.

The combined company (which features more than 6,000 patents dealing with digital media distribution) is expected to realize at least $100 million in annual cost synergies, with 65% of these synergies recognized in the first 12 months.

The companies believe that they will be able to obtain the requisite regulatory clearances and close by the third quarter.

B. Riley & Co. analyst Eric Wold said that despite the fact Rovi and TiVo share many of the same licensees, it would be a competitive advantage to approach customers with an integrated/deployment process and solution from the best IP of both companies.

Wold said Rovi’s IP would do well integrated within TiVo’s 10 million households and TiVo’s IP would do well to improve Rovi’s 18 million service provider (pay-TV) households.

“We believe the timing of a transaction makes sense given each company hitting license tailwind inflection points, meaningful cost synergies, and the opportunity to coordinate efforts within the industry with a combined patent portfolio,” Wold wrote in a May 2 note.

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